This Investment Company Registration and Regulation Package (“Package”) contains general information about investment companies (e.g., mutual funds, closed-end funds, and unit investment trusts) and supersedes the “Investment Company Registration Package” that was previously distributed in a printed format. Due to continuous changes in the federal securities laws, we no longer print the Investment Company Registration Package in hard copy. All of the information that was contained in the prior version, however, is now available through hyperlinks to Internet web sites, which are provided below. Further, SEC publications are available from the SEC’s Publications Office by calling (202) 551-4040.

Important Note about the Scope of the Information Provided in this Package

This Package is intended to serve as a general guide only. It is not a comprehensive manual on the regulation of investment companies, investment company service providers, or related entities. This Package is not intended to provide formal or binding legal advice of the Commission or the staff and is not a substitute for, and may not be relied on instead of, the actual federal securities laws and the advice of legal counsel. If you intend to start an investment company, or have legal questions regarding the regulation of investment companies or similar companies, you must consult the applicable statutes and rules. Frequently, you also will need to consult interpretive guidance (e.g., legislative history, Commission releases, and no-action letters). We further recommend that you consult with an attorney and with a certified public accountant with experience under the federal securities laws. This Package was prepared by the SEC staff. The Commission has expressed no views regarding its content.

If you have questions or comments about this Package or the information in the listed web sites, please telephone us at (202) 551-6865, or E-mail us at IMOCC@sec.gov.

Open-end companies (“mutual funds”) are management investment companies that offer or have outstanding redeemable securities of which they are the issuers. See Section 5(a)(1) of the Investment Company Act. The term “redeemable security” is defined in Section 2(a)(32) of the Investment Company Act. Mutual funds hold a portfolio of securities, typically managed by an investment adviser. Mutual funds generally offer an unlimited number of their shares to the public on a continuous basis.
Closed-end companies (“closed-end funds”) also hold a portfolio of securities managed by an investment adviser and include all management investment companies that do not issue redeemable securities. They usually offer to the public a fixed number of non-redeemable securities. SeeSection 5(a)(2) and Section 23 of the Investment Company Act. Closed-end fund shares typically trade in the secondary market, usually on stock exchanges.

Interval funds are a category of closed-end funds that differ from traditional closed-end funds because their securities are subject to periodic repurchase offers by the interval fund at net asset value. Interval funds also may differ from traditional closed-end funds by offering their shares continuously at net asset value. SeeRule 23c-3 under the Investment Company Act).

Business development companies (“BDCs”) are a category of closed-end funds that are operated for the purpose of making investments in small and developing businesses and financially troubled businesses. SeeSection 2(a)(46) of the Investment Company Act. BDCs make available significant managerial assistance to those portfolio companies. SeeSection 2(a)(48) of the Investment Company Act. BDCs are provided greater flexibility under the Investment Company Act than are other investment companies in dealing with their portfolio companies, issuing securities, and compensating their managers. See Sections 54 through 65 of the Investment Company Act. In addition, BDCs are not required to register as investment companies under the Investment Company Act. They are, however, required to register their securities under the Securities Exchange Act of 1934. See alsoAdoption of Permanent Notification Forms for Business Development Companies; Statement of Staff Position, SEC Release No. IC-12274 (Mar. 5, 1982), and Interim Notification Forms for Business Development Companies, SEC Release No. IC-11703 (Mar. 26, 1981), for a discussion of the regulatory system applicable to BDCs.

(b) Unit investment trusts (“UITs”) are investment companies that do not have a board of directors, corporate officers, or an investment adviser. They generally invest in a relatively fixed portfolio of securities. UITs typically offer to the public a specific, fixed number of redeemable securities (or “units”). UIT sponsors may maintain a secondary market for trading UIT units after the initial public offering. See Sections 4(2) and Section 26 of the Investment Company Act.

What is Not Regulated as an Investment Company?

Investment pools that do not meet the definition of “investment company” in Section 3(a) of the Investment Company Act because, for example, they do not invest in securities (e.g., commodity pools that do not hold or invest in securities) are not investment companies and, therefore, are not regulated as investment companies under the Investment Company Act. (Such issuers may, however, be required to register their securities under the Securities Act.)

The Investment Company Act also specifically excludes certain investment pools from the definition of “investment company.” The Investment Company Act also exempts from regulation under the Investment Company Act a number of investment pools and entities. If an issuer falls within one of these exclusions or exemptions, it may not register as an investment company with the Commission. For example:

Section 3(b)(2) of the Investment Company Act provides that the Commission may exclude some issuers from the definition of investment company if the Commission, upon application by the issuer, finds and by order declares the issuer to be primarily engaged in a business other than that of investing, reinvesting, owning, holding, or trading in securities either directly or through majority-owned subsidiaries or through controlled companies conducting similar businesses.

Section 3(c) of the Investment Company Act excludes certain other issuers from the definition of investment company. These issuers include, for example, broker-dealers, charitable organizations, pension plans, and church plans. Two exceptions under Section 3(c) of the Investment Company Act are discussed in more detail below under “Private Investment Companies.”

Section 6 of the Investment Company Act exempts certain investment companies from the provisions of the Investment Company Act, such as investment companies organized or otherwise created under the laws of, and having their principal office and place of business in Puerto Rico, the Virgin Islands, or any other possession of the United States, whose securities are not offered or sold except in the jurisdiction in which the investment company is organized. Further, Section 6(c) of the Investment Company Act provides the Commission with broad authority to exempt persons, securities or transactions from any provision of the Investment Company Act, or the regulations thereunder, if and to the extent that such exemption is in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Investment Company Act. See Commission Policy and Guidelines for Filing of Applications for Exemption, SEC Release No. IC-14492 (Apr. 30, 1985) (available by contacting the Commission’s Publication Unit at (202) 942-4040). Issuers that are not subject to the Investment Company Act must consider whether they may be subject to any obligations under the other federal securities laws.

Investment Clubs. Investment clubs may not be investment companies at all. An investment club is a group of people who pool their money and invest it in securities. Each person in the investment club holds a membership interest in the pool. If every member in an investment club actively participates in deciding what investments to make, the membership interests in the club may not be considered securities as defined in the Investment Company Act. If the investment club has any passive members, however, it may be issuing securities and should consider its regulatory obligations under the Investment Company Act and other federal securities laws. Also, investment clubs that do not invest in securities are not investment companies.

Section 3(c)(1) excepts from the definition of investment company any issuer whose outstanding securities (other than short-term paper) are beneficially owned by not more than one hundred persons and that is not making and does not at that time propose to make a public offering of such securities.

Section 3(c)(7) excepts from the definition of investment company any issuer whose outstanding securities are owned exclusively by persons who, at the time of acquisition of such securities, are qualified purchasers and that is not making and does not at that time propose to make a public offering of such securities. The term “qualified purchaser” is defined in Section 2(a)(51) of the Investment Company Act.

Registration Requirements

If an investment company is organized or otherwise created under the laws of the United States or of a State, meets the definition of an investment company, and cannot rely on an exception or an exemption from registration, generally it must register with the Commission under the Investment Company Act and must register its public offerings under the Securities Act. Issuers that are excluded or exempted from the definition of investment company should consider whether they may be subject to obligations under the other federal securities laws.

An investment company that is organized or otherwise created under the laws of a foreign country may not register as an investment company, or publicly offer its securities through interstate commerce in the United States, unless the company applies to the Commission for an order permitting the company to register under the Investment Company Act, and to make a public offering in the United States. The Commission may issue an order granting the application if the Commission finds that, by reason of special circumstances or arrangements, it is both legally and practically feasible effectively to enforce the provisions of the Investment Company Act against the company, and further finds that granting the application is otherwise consistent with the public interest and the protection of investors. SeeSection 7(d) of the Investment Company Act. Foreign investment companies, however, generally find it difficult or undesirable to meet this standard because foreign regulatory schemes differ significantly from the Investment Company Act.

How to File Forms with the Commission

Investment companies must file most forms electronically, using the Commission’s Electronic Data Gathering and Retrieval system (“EDGAR”). Information about how to make filings on EDGAR is available on the Commission’s web page, or by contacting EDGAR Filer Support at (202) 551-8900.

Registration Fees

Registration fees for investment companies are calculated pursuant to Section 6(b) of the Securities Act. Closed-end funds pay their registration fees prior to the effective date of their registration statements. Mutual funds and UITs, however, are not required to pay registration fees when they initially file their registration statements. Under Section 24(f) of the Investment Company Act, mutual funds and UITs register an indefinite amount of securities under the Securities Act when their initial registration statements become effective. Mutual funds and UITs are required to file annual notices on Form 24F-2 with information about the number and amount of securities sold and redeemed in the past fiscal year, and must pay their filing fees with their annual notices.

Other Requirements

Commission and Shareholder Reports

After registering with the Commission, investment companies periodically must file certain reports with the Commission and send certain reports to their shareholders. For example, registered management investment companies must file Form N-CSR within ten days after the transmission to shareholders of any annual or semi-annual report that is required to be transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act.

Minimum Capital Requirements

Investment companies are subject to minimum capital requirements. No registered investment company and no principal underwriter of a registered investment company may publicly offer an investment company’s shares unless the investment company meets the applicable minimum capital requirements. SeeSection 14(a) of the Investment Company Act. This capital must be provided with a bona fide investment purpose, without any present intention to dispose of the investment, and must not be loaned or advanced to the investment company by its promoters.

State Regulation of Investment Companies

The activities of investment companies generally are not regulated by the states. States may, however, require investment companies to file notices with them and pay filing or registration fees. Information about state securities laws is available from state securities regulators. SeeNorth American Securities Administrators Association.

Frequently Asked Questions and Answers About:

1 Small Entity Compliance Guide. The Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121 (1996), requires federal rulemaking agencies, including the Commission, to publish “small entity compliance guides” to assist small entities in complying with the agencies’ rules. The Commission has designated this Package as a small entity compliance guide. See 17 C.F.R. § 202.8(e) (2004).